BOSTON, July 24, 2024 -- Over the past decade, the capacity of data center Ethernet switches has surged from 0.64 Tbps to 25.6 Tbps, driven by the adoption of 64x400 Gbps or 32x800 Gbps pluggable optical transceiver modules. However, these high-speed modules, within their current form factors, pose significant challenges. Issues include the required densities of electrical and optical connectors, as well as escalating power consumption.
To achieve next-generation optical engines supporting 800 Gbps and beyond per module, the communication rate must double to at least 100 Gbps per lane. This increase introduces substantial signal integrity issues across the switch socket, motherboard, and edge connector, leading to heightened power dissipation at SerDes interfaces. In future Ethernet switching, these signal integrity problems may cause I/O power consumption to exceed that of the switch core. Additionally, the integration density of standard pluggable modules is limited by the QSFP/OSFP form factor, necessitating advanced thermal management solutions not yet widely available.
Co-Packaged Optics (CPO) presents a promising solution to these challenges. Unlike traditional pluggable models, CPO integrates optical modules directly onto the switch ASIC substrate, reducing electrical reach and effectively addressing signal integrity issues. This approach has gained traction among major data centers. However, optimizing the packaging strategy for CPO remains a topic of ongoing industry discussion and development. IDTechEx's latest report, "Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts", explores these advancements in CPO technology and packaging techniques enabling its adoption.
The importance of advanced semiconductor packaging technologies for Co-Packaged Optics (CPO)
The integration of CPO in data centers aims to boost I/O bandwidth and reduce energy consumption. The way photonic integrated circuits (PICs) are combined with electronic integrated circuits (EICs) and switch ICs, can significantly influence the areal and edge bandwidth density, as well as packaging parasitics. These factors directly affect the transceiver's I/O bandwidth and energy efficiency, meaning improper integration can negate the advantages of silicon photonics.
For CPO, the integration of photonic and electronic components can be achieved through various methods, each with unique advantages and challenges. The most advanced, and still in the R&D phase, is the 3D monolithic integration. This embeds photonic components within an existing electronic process node with minimal alterations, co-locating active photonics and driving electronics within the same die. This reduces parasitics and simplifies packaging by eliminating the need for interface pads and bumps. However, monolithic integration typically uses older CMOS nodes, resulting in suboptimal photonic performance and higher energy consumption. Despite these limitations, it offers minimal impedance mismatch and simplified packaging.
Conversely, 2D integration places the PIC and EIC side by side on a PCB, connected by wire bonds or flip-chip. This method is straightforward and cost-effective, but introduces significant parasitic inductance, limiting aggregate I/O due to single-edge connections. While 2D integration is easy to package, the reliance on wire bonds constrains the transceiver bandwidth and increases energy consumption, making it less efficient for high-performance applications.
3D hybrid integration offers a more advanced solution by placing the EIC on top of the PIC, via various advanced semiconductor packaging technologies including Through-Si-Via (TSV), high density fan-out, Cu-Cu hybrid bonding, and active photonic interposer, significantly reducing parasitics. The use of advanced semiconductor packaging technologies in 3D integration allows for dense pitch capabilities, enhancing performance. However, thermal dissipation remains a challenge, as the heat generated by the EIC can impact the PIC, necessitating advanced thermal management solutions. Despite these thermal challenges, 3D hybrid integration achieves higher performance due to minimized packaging parasitics.
2.5D integration serves as a compromise, with both the EIC and PIC flip-chipped onto a passive interposer with TSVs. This approach maintains manageable parasitics and dense pitch capabilities similar to 3D integration but adds complexity with the need for interposer traces. While 2.5D integration balances performance, cost, and fabrication turnaround, it incurs higher parasitics than 3D hybrid integration.
In summary, each integration method presents trade-offs between performance, complexity, and cost, with the choice based on specific application requirements and constraints.
Co-Packaged Optics (CPO) market trajectory
According to IDTechEx, the Co-Packaged Optics (CPO) market is projected to exceed $1.2 billion by 2035, growing at a robust CAGR of 28.9% from 2025 to 2035. CPO network switches are expected to dominate revenue generation, driven by each switch potentially incorporating up to 16 CPO PICs. Optical interconnects for AI systems will constitute approximately 20% of the market, with each AI accelerator typically utilizing one optical interconnect PIC to meet increasing demands for high-speed data processing and communication in advanced computing applications.
IDTechEx's latest report, "Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts", offers extensive exploration into the latest advancements within Co-Packaged Optics technology. The report delves deep into key technical innovations and packaging trends, providing a comprehensive analysis of the entire value chain. It thoroughly evaluates the activities of major industry players and delivers detailed market forecasts, projecting how the adoption of CPO will reshape the landscape of future data center architecture.
Central to the report is the recognition of advanced semiconductor packaging as the cornerstone of Co-Packaged Optics technology. IDTechEx places significant emphasis on understanding the potential roles that various semiconductor packaging technologies may play within the realm of CPO.
Key aspects of the report include:
- Market Dynamics: Examination of key players such as Nvidia, Broadcom, Cisco, Ranovus, and Intel, and the forces shaping the CPO landscape.
- Innovations in CPO Design: Exploration of advanced CPO designs and their implications for enhancing data center efficiency and shaping future architecture.
- Semiconductor Packaging Breakthroughs: Insight into the latest advancements in semiconductor packaging, including 2.5D and 3D technologies, and their role in enabling CPO innovation.
- Optical Engines: Analysis of the drivers behind CPO's performance and efficiency advantages.
- CPO for AI Interconnects: Exploration of how optical I/O can address the limitations of copper connections in AI applications, improving efficiency, latency, and data rates.
- CPO for Switches: Assessment of the potential 25% efficiency gains in high-performance network switches through CPO integration.
- Challenges and Solutions: Critical review of obstacles to CPO adoption and strategies to overcome them.
- Future Analysis: Predictions and insights into the next generation of CPO and its anticipated impact on the industry.
The report is based on extensive research and interviews with industry experts and provides valuable insights for anyone interested in gaining a strategic understanding of Co-Packaged Optics' role in advancing the future of data centers and AI technology.
- Market Forecasts:
- 10-year Data Center Population Cumulative Forecast
- 10-year AI Accelerator Unit Shipments Forecast
- 10-year CPO Interconnect for AI (Optical I/O) Unit Shipments Forecast
- 10-year CPO Interconnect for AI (Optical I/O) Market Revenue Forecast
- 10-year CPO-enabled Network Switch Unit Shipments Forecast
- 10-year CPO-enabled Network Switch Market Revenue Forecast
- 10-year Total CPO Market Revenue
For more information on this IDTechEx report, including downloadable sample pages, please visit www.IDTechEx.com/CPO.
For the full portfolio of related research available from IDTechEx please see www.IDTechEx.com/Research/Semiconductors.
About IDTechEx
IDTechEx provides trusted independent research on emerging technologies and their markets. Since 1999, we have been helping our clients to understand new technologies, their supply chains, market requirements, opportunities and forecasts. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.
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